Ending QE Early Would Be Hawkish... Right?

It's a near-certainty that the Fed will use today's meeting statement to formalize the end of pandemic-era QE - the last $30B is expected to be bought in the next NY Fed monthly purchase ops schedule (announced Feb 11, running to mid-March).

• But there's a risk that they opt to announce today that the purchases will end a month early. (Of the previews we read, only ING and Nomura said that was their expectation.) We've included this question in our "Instant Answers".
• We'd expect the market reaction to such a surprise outcome to be hawkish: while a $30B difference in the size of the balance sheet doesn’t make a significant difference to policy, it would cement a March hike and signal that the FOMC intends to wind down existing purchases earlier rather than later.
• But ING for one sees a dovish reaction: "this move may fuel speculation that the Fed may want to let the balance sheet reduction do the heavy lifting in the policy normalization process, which could ultimately cause a dovish re-pricing of tightening expectations."
• To the extent that this is the perception, the Tsy curve would be expected to steepen as rate hikes are priced out and more aggressive balance sheet runoff is priced in. But it'll be up to Powell in the press conference to explain the Fed's intentions in this scenario.